Sustainable Finance and Insurance: Opportunities and Challenges

Richard Apau () and Athenia Bongani Sibindi ()
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Richard Apau: University of South Africa
Athenia Bongani Sibindi: University of South Africa

A chapter in Sustainable Finance and Insurance in Africa, 2025, pp 9-21 from Springer

Abstract: Abstract In response to the evolving challenges of the global economy and urgent social issues, this chapter articulates the necessity of integrating sustainable finance and insurance into traditional investment and financial planning paradigms. While conventional finance often concentrates on risk-return dynamics, it neglects the critical interconnections between environmental sustainability and governance, which significantly influence long-term economic stability. Recent global crises, such as the COVID-19 pandemic and escalating environmental disasters, have exposed the limitations of current financial risk management strategies, underscoring the imperative for innovative financing solutions. This chapter explores unconventional financing models, such as community cooperatives and credit unions, which empower local economic development and support marginalised communities. With over $2 trillion committed to various social interventions worldwide, these models exemplify how alternative funding can foster equitable employment and environmentally sustainable practices. A key focus is on green finance, which prioritises investments aimed at promoting environmental protection alongside economic growth. By aligning investment portfolios with the United Nations Sustainable Development Goals (SDGs), green finance serves as a vital framework for ensuring that financial systems not only address contemporary needs but also contribute to the health of the planet for future generations. Additionally, the chapter examines three interdependent perspectives on sustainable finance: sustainability, risk, and efficiency. It articulates how these dimensions facilitate resource allocation towards resilient social systems and fair asset pricing, essential for robust economic stability. Ultimately, this discourse advocates for embedding sustainable principles within financial decision-making, emphasizing that a resilient financial system must champion ecological integrity and socio-economic inclusivity. Through this comprehensive exploration, we aim to highlight the transformative potential of sustainable and green finance as foundational elements of global well-being and environmental stewardship in an uncertain future.

Keywords: Green finance; Social finance; Environmental; social; and governance categories of sustainable finance; Sustainable development goals; Africa (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:aaechp:978-3-031-86516-9_2

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DOI: 10.1007/978-3-031-86516-9_2

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